Silicon photonics refers to the application of photonic systems using silicon as an optical medium. The silicon material used in such photonic systems is designed with sub micrometer precision and is deployed into the microphotonic components. The silicon photonics systems works at the wavelength of 1.55 micrometer that falls under the infrared spectrum and is most commonly used for optical communications. Silicon photonics combines technologies such as complementary metal oxide semiconductor (CMOS), micro-electro-mechanical systems (MEMS) and 3D Stacking. The basic operation of silicon photonics includes the transfer of data as optical rays between the computer chips. Silicon photonics is basically an approach for designing optical devices using silicon and use photons to transfer enormous data at high speeds. Additionally, this technology enables data transfer at low power consumption over an optical fiber. Moreover, silicon photonics satisfies the mounting need of high data transfer rate and enhances the capabilities such as computational and processing needs of data centers.

Pressing bandwidth, cloud computing performance needs for data centers, virtualization, fast-growing internet traffic and other intensive data are the key factors driving the growth of silicon photonics market. Silicon photonics are majorly used in telecom, datacom, consumer applications (connecting laptops, PCs, HDTVs), datacenters and high performance computers, commercial video, metrology and sensors, medical, military and aerospace. Data communication is one of the major market share holders and it dwarfs all other silicon photonics application. In addition, features such as low environmental footprint, low heating of components, low operating cost, high optical functions integration, high density of interconnects, low error rate and spectral efficiency are adding value to the silicon photonics products. Thus, these factors are expected to drive the market of silicon photonics in the coming years. However, the major challenges such as technical mismatches with high volume markets and availability of substitute technologies such as vertical-cavity surface-emitting laser (VCSEL) are expected to hinder the growth of silicon photonics market.

The silicon photonics based systems deploy several components such as wavelength division multiplexer filters, optical modulators, optical interconnects, silicon photonic waveguides, silicon LED's and silicon photo-detectors. The silicon photonics systems exhibits physical properties such as optical guiding and dispersion tailoring, Kerr non-linearity, two-photon absorption, free charge carrier interaction, second order non-linearity and the Raman effect. These properties govern the propagation of light through an optical medium. Silicon photonics technology is used for providing optical interconnects, optical routing and signal processing. Moreover, with technological advancement it is expected that this technology will widely be deployed for long range communication applications over the coming years. Silicon phonics finds its applications in several industries such telecommunications, IT, sensing and metrology, healthcare, consumer electronics and displays, and research and development.

Countries with high level of technology adoption and advancement across North America and Europe are the leading markets for silicon photonics. Moreover, Asia Pacific market is expected to witness rapid technological upgrades and thus serves as an opportunity for this market in the coming years. The ongoing use of silicon for developing integrated circuits and the compatibility of silicon photonics technology with the existing fabrication techniques encourages several research institutes and large players in the electronic manufacturing industry to adopt silicon photonics technology. Leading players in silicon photonics market are Luxtera, Molex Inc., Mellanox Technologies, Northrop Grumman, Global Foundries, Altis, Texas Instruments, BAE Systems, TSMC, Avago Technologies, LightWire, Intel, Teraxion, Infinera, Color Chip, Fujitsu, Cisco, HP, IBM, NTT, Oracle, Leti, imec, ePIXfab, Scorpios Technologies, Caliopa and Aurrion among others.